Senate Bill S6324A

                                BILL NUMBER:S6324

TITLE OF BILL:
An  act  to  amend  the  tax  law,  in  relation  to exempting certain
wholesalers of beer from the requirement of filing annual  information
returns for purposes of sales taxes

PURPOSE:
Exempts  certain  beer wholesalers, authorized to sell beer at retail,
from the filing of additional information returns with the  Department
of Taxation and Finance.

SUMMARY OF PROVISIONS:
Section  one amends Subparagraph (C) of paragraph 1 of subdivision (i)
of section 1136 of the tax law, as added by section 1 of subpart G  of
part V-1 of chapter 57 of the laws of 2009

JUSTIFICATION:
This  bill  would  exempt a very small category of businesses from the
2009 amendments to  the  tax  law  that  require  all  wholesalers  of
alcoholic  beverages  (liquor  and  beer)  to  file  electronic annual
information returns,  including  extensive  and  detailed  information
about each sale of alcoholic beverages where no sales tax is collected
(i.e., sales to retail vendors), including:

* the vendor's name (legal entity name);
              

* the vendor's DBA (if different from legal entity name);

* the vendor's New York State Liquor Authority License Number (SLA
);

*  the  total  monthly  sales  of  alcoholic  beverages to each vendor
(exclusive of total amounts for deposit and returns);

* the month and year of sales reported;

* the vendor's phone number;

* the vendor's address as it appears on its SLA license;

* The vendor's Federal  Identification  Number  (EIN),  which  is  the
vendor's  Social  Security  Number if vendor is a sole proprietorship;
and

* The vendor's New York  State  Sales  Tax  Certificate  of  Authority
Number.

The  2009  amendment  also  requires wholesalers to give each vendor a
statement showing the same information reported for that vendor on the
information return. Penalties for failure to collect  the  information
or to file electronic returns can range up to $10,000.

The  new  reporting  requirement  works  quite  well  for major liquor
wholesalers  and  giant  franchised  beer   wholesalers,   all   large
businesses   with   easy   access   to   technology   and   accounting
professionals. However, the 2009 amendment caught up  in  its  net  of


detailed   electronic   recordkeeping   and  internet-only  returns  a
relatively tiny group of C-licensed beverage centers, typically  small
neighborhood   businesses  that  hold  wholesale  beer  licenses  with
off-premises retail privileges.

Many   of  the  surviving  C  Licensed  beverage  centers  are  small,
multi-generational "mom and pop" operations that use written  invoices
and  receipts,  often as many as three to four-hundred a day. The 2009
amendments require them to compile the information from many different
paper sources, often at great  cost,  for  businesses  that  are  just
barely surviving to stay open.

The  impact  of  the  exemption  proposed  in  this  bill on state tax
operations would be minimal. Of the 300 or so  surviving  C  licenses,
many  do  exclusively  retail  business.  Others  do minimal wholesale
business, typically serving  accounts  like  taverns  and  bodegas  in
neighborhoods  the  franchised  wholesalers  regard as uneconomical or
serving  as  a  fill-in  source  on  evenings  or  weekends  when  the
franchised wholesalers are closed. To further minimize the impact, the
exemption  would  not  apply  to  a  C  Licensee  that is a franchised
wholesaler, unless the franchised brand represents a tiny  segment  of
the market.

This  bill  would  give  a  small  break  to hard-pressed neighborhood
family-run businesses already nearly regulated  out  of  existence  by
freeing   them   from   onerous,   complex   and  expensive  reporting
requirements. Beverage centers would still keep records,  which  would
be  available  to  the  state  on request, as it was prior to the 2009
amendments.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
January 1 next succeeding the date after it becomes law.